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Thread: Are games costing simply too much to make these days? Or is it smoke and mirrors?

  1. #1

    Default Are games costing simply too much to make these days? Or is it smoke and mirrors?

    I was discussing this subject on an international forum, and this is what one person had to say:

    "I work for a software development company. Around half of the staff have worked in video game development. All were eventually made redundant.

    They are artists, programmers, producers. A couple worked at EA, THQ etc.

    It's very expensive to make even ****ty games for consoles these days.
    PC sales are dying. The casual gaming market is now about buying lots of games on mobile for 99c.
    Serious gamers still exist, but they are less and demand higher quality.

    Remember that guy on here who was always trying to get EA to listen to him about Fight Night?
    I went to a guy I work with, ex video game industry and chatted about it, using kick starter etc.

    With bare bones staff, artists etc. he said don't even think about it without at least a million dollars. Preferably 2.

    And then you've got to cut a deal with distributors etc all wanting their piece.

    And then he said "and the game would be ****. It would look and feel cheap"

    Yeah, some development studios aren't run well. But it's expensive to make these games.
    Mobile gaming, piracy etc. all eat away at the profitability"


    It's said that Darksiders II will need two million sales just to break even. The title has currently sold a tad less than half of that. That strikes me as an absurd figure just to break even.
    Last edited by .exe; 02-11-2012 at 12:10 PM.

  2. #2

    Default Re: Are games costing simply too much to make these days? Or is it smoke and mirrors?

    I think it comes down to over greedy investors.
    Who want massive returns! which I know makes the world go round but really.

    Maybe they need to be be okay with making 5 million dollars over 5 years instead of in 2 years.

    I think the investors and big head honcho's at the distributors and publishing houses are taking home huge salaries and therefor killing the studio's. If everyone took a decent cut but slightly smaller cut, prices would surely be lower for the end consumer = more sales = greater profits for everyone.

  3. #3

    Default Re: Are games costing simply too much to make these days? Or is it smoke and mirrors?

    Don't you think over saturation is also playing a role in declining profit margins. Think about how many games are released these days this year alone has been ridiculous customers are now spoilt for choice and with the increasing price of games people cannot afford to buy 2 or 3 mainstream releases a month.

    Furthermore market penetration has vastly increased, think about how easy it is to buy a game these days. Log onto your PC click steam go to the store and click buy. There done. Now couple this with specials discounts on games 1 year old.

    Just my thoughts.

  4. #4
    Winner of the Chippit Badge for Being The Awesome New Guy Grimnebulin's Avatar
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    Default Re: Are games costing simply too much to make these days? Or is it smoke and mirrors?

    The answer is unfortunately far more complicated then simply saying 'greed'. And it's important to understand the concept of the investor. When a studio approaches a group of investors looking for financial backing, they approach them with a business plan, and that plan will list what kind of returns the investors could expect. Sure, there's a period of negotiation, but it's not the investor driving nor dictating that process. Once an agreement has been reached, the investor will naturally be watching the development process unfold, and will no doubt step in if they anticipate problems, but that's not greed that is protecting your investment. If you invested R500 a month in an annuity, having been told you could expect an x% return only to witness that investment going south, it's not greed that would motivate your actions to get involved, is it?

    If there is a problem, and the recent 38 Studios debacle is a perfect example of this, it's that investors aren't being given a realistic idea on ROI (return on investment). But that's also just one part of the concept of an investor. The traditional understanding is purely a fiscal one, that you are putting money in to get money out, but fortunately the industry has started to realise that there exists a variety of ways to approach investors. Take Kickstarter for example. The gamer becomes the investor, not to realise a profit, but because their inevstment is so much more than a financial one. The gamer becomes less an investor, and more a patron of sorts. But there again, it's of utmost importance that the developer be mindful of budget, and have a decent enough understanding of economics to draw up an accurate budget.

    The other contributing factor is simply that the cost of making a AAA game has skyrocketed. The average credits sequence for an Assassin's Creed of a Call of Duty is probably twice as long as that of the latest Michael Bay movie. Why? Specialisation. As technology progresses, it becomes more and more difficult to employ someone who is skilled at multiple disciplines. More progammers, more animators, more script writers, more testers, and that's not even taking into consideration the global nature of gaming. Call of Duty is translated into multiple languages, thus additional voice actors, additional writers, management to oversee etc etc etc. And then there's still marketing being done in a myriad of languages in dozens of countries.

    Most studios would tell you that they should actually be charging far more than $60 to actually stand a realistic chance of turning a profit. But they can't. And that's exactly why DLC exists. Collectors editions. Preorder bonuses. etc etc.

    And then we also need to be honest with ourselves. Have games really become that much more expensive of late? How much were you paying for a PS1 game ten years ago. A PS2 game 6 years ago? Factor in inflation?

    We, the consumers are also ultimately responsible for what we pay. Take Diablo 3 as a recent example. Who of us have ever paid more than R400 for a pc game before D3? And yet how many copies did D3 sell? Clearly, you and I might not necessarily be able to afford the latest titles, but millions still can. And if they are willing to pay at that price point, that's where the price point is going to stay.

    The good news is that things do seem to be changing. Not on a grand scale yet, but changing nevertheless. It is still too early to know whether Guild Wars 2's approach will be viable over the long term, but considering it's sold over 2 million copies thus far, it's encouraging that the 'buy once off' model for MMOs just might work. The latest Medal of Honour game seems to be failing for all the right reasons. EA's reputation is in the dirt, and Kickstarter and similar programs are on the rise.

    But it's going to take far more than that, and the rise of the 99c tablet game is a massive threat deserving of it's own thread.
    Last edited by Grimnebulin; 02-11-2012 at 02:45 PM.

  5. #5

    Default Re: Are games costing simply too much to make these days? Or is it smoke and mirrors?

    Quote Originally Posted by Grimnebulin View Post

    and the rise of the 99c tablet game is a massive threat deserving of it's own thread.
    Please...the floor is yours. Keep going.

  6. #6

    Default Re: Are games costing simply too much to make these days? Or is it smoke and mirrors?

    I think what the AAA industry really needs is a new generation of consoles. It's ridiculous that the majority of AAA games are being developed for a system which has less RAM than my mobile phone. This means that developers have to go to extreme lengths to optimise their games so that they can get a playable frame rate out of an eight year old system. I've no programming experience so please do interject and tell me I'm wrong, but is it not this exactly which has forced the need for such specialisation? Where before it was okay if you had a guy who was an expert in one area and only competent in another. If he didn't create the most efficient programs that didn't matter because system resources weren't limited.

    Just look at projects like the Roberts Space Industries kickstarter and see what they are planning on much less than a AAA budget. Because they aren't developing for current generation consoles they don't have to worry about hardware limitations and I think this is why they can plan such grand projects on such a low budget. So my argument here is that games are costing too much and the reason for it is the amount of optimisation developers have to do.

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